Job Destruction and Propagation of Shocks

UCSD Economics Discussion Paper 97-23

56 Pages Posted: 26 Jan 1998

See all articles by Wouter J. den Haan

Wouter J. den Haan

University of Amsterdam; Centre for Economic Policy Research (CEPR); Tinbergen Institute

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

Joel Watson

University of California, San Diego (UCSD) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 1997

Abstract

We develop and quantitatively implement a dynamic general equilibrium model with labor market matching and endogenous job destruction. The model produces a close match with data on job creation and destruction. Cyclical fluctuations in the job destruction rate serve to magnify the effects of productivity shocks as output, as well as making the effects much more persistent. Interactions between household savings decisions and separation decisions in employment relationships play a key role in propagating shocks.

JEL Classification: E24, E32, J64, E13

Suggested Citation

Den Haan, Wouter J. and Ramey, Garey and Watson, Joel, Job Destruction and Propagation of Shocks (October 1997). UCSD Economics Discussion Paper 97-23, Available at SSRN: https://ssrn.com/abstract=48642 or http://dx.doi.org/10.2139/ssrn.48642

Wouter J. Den Haan (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

HOME PAGE: http://www1.feb.uva.nl/toe/content/people/content/denhaan/pers.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-5721 (Phone)
858-534-7040 (Fax)

Joel Watson

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-6132 (Phone)
619-534-7040 (Fax)